Water bill limits set by watchdog

Regulator Ofwat is set to deliver its verdict on water bills for millions of UK households over the next five years.

Its "draft determination" will set price limits on the bills that can be charged by the UK's 21 water and sewerage companies between 2010 and 2015.

The average household water and sewerage bill in England and Wales has already risen £13 to reach £342 in 2009/10.

But the water companies' final business plans submitted in April are pushing for an extra £28 increase in bills above inflation by 2015 - likely to be resisted by the regulator.

The firms - which plan to spend more than £20 billion on the network over the next five years - want Ofwat to allow a higher return to cope with the impact of recession as well as higher financing costs following the credit crunch.

But Ofwat is unlikely to be generous to the companies after being criticised for its leniency in the 2004 review.

Chief executive Regina Finn said when the firms submitted their final plans that the watchdog would "do everything possible to secure sustainable, value-for-money services for consumers".

South West Water - the dearest in the country due to its lower population and biggest coast line - is proposing a 6% rise in bills to £481 per household.

The UK's biggest water company, Thames Water, wants to hike bills by 17% to £331 per household. It said its £5.5 billion investment plans for London's ageing network were vital to prevent even higher bills in future.

Following the initial decision, the regulator will consider representations from water companies over the coming months before giving its final verdict on prices in November.